Greek Company produces and sells 22,000 units of a single product. Costs associa

Question

Greek Company produces and sells 22,000 units of a single product. Costs associated with this level of production are as follows: Direct materials $15 Direct manufacturing labor 45 Variable manufacturing overhead 25 Fixed manufacturing overhead 30 Total $114 The product normally sells for $145 per unit. Greek Company has received a special order to sell 2,000 units at $100 per unit. Greek Company has excess production capacity. Compute the amount by which the operating income of Greek Company would change if the order were accepted

Explanation / Answer

30,000 Greek - assuming that product cost includes direct expenses and variable overhead.

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